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10/3/2011
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Guess Combines Facebook, BI To Boost Sales

Guess aims to get closer to customers with Microstrategy's new Facebook analytics tools.

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Apparel retailer Guess is first in line to try using Microstrategy's Facebook analytics to improve its connections with consumers through social media.

Microstrategy's Gateway for Facebook product was announced in July as part of a cloud computing strategy for business intelligence.

Although the Guess Facebook page has well over 1 million fans, Guess CIO Michael Relich says he is still seeking better ways of making social media promotions convert directly to sales. Now that Facebook supports HTML iFrame integration of content and applications, selling on Facebook is not technically challenging--but that doesn't mean it's effective, Relich said.

[New social applications can post what you're reading, watching, or listening to without you clicking the "Like" button. Should you let them? See Facebook Frictionless Sharing: 4 Privacy Steps.]

"People play with it, but the conversion rate on that is about a tenth of a percent," Relich said. Specific promotions can drive much greater response, "but even then it's hit and miss," he said. "When we do coupons, yeah we get some activity, but I wouldn't say it's overwhelming." In contrast, when Guess sends out promotions by email, the open rate of recipients who view the message is about 10 to 15%.

For a better response, Relich would like to do a better job of segmenting the Facebook audience and targeting messages to members based on their demographics or interests. "The app is almost like a Trojan horse. It lets us augment what's in our CRM system, and then start doing targeted segmentation," he said.

What Microstrategy is providing is a way of extracting that data from Facebook and organizing it for easier analysis. Microstrategy is pitching this capability to business as a way to "pull the data into a technology much more familiar to their IT department--a relational database rather than a social application--and let you build much richer apps than you ever could based on Facebook APIs alone," said Mark LaRow, senior VP of product. The Facebook APIs are primarily designed to pull data into Facebook, not to get it out in the kind of formats businesses need for analysis, he said.

One way of getting more data about Facebook users is to convince them to authorize an application that will have access to their profile and network connections. Relich plans to use a modified version of the Alert app for the iPhone, which Microstrategy created to demonstrate the value of analytics to both consumers and brands. The app allows consumers to organize the Facebook pages they are most interested in tracking and get alerts from those pages, as well as tracking other news of interest. In return, Microstrategy is getting permission to mine the consumers' profiles and demonstrated interests. The Guess version of the app will be rebranded and customized to promote its own brands and those of affiliated companies. Guess has also integrated its loyalty program, giving the application access to "customer lifetime value to me, combined with those Facebook demographics."

"Right now, when someone signs up for our loyalty program, we don't want to ask too much demographic information" and scare them off, Relich said. Even basic information like where someone lives can drift out of synch with reality because consumers don't necessarily take the time to update their profiles in the loyalty system--which they will never visit as often as they do their Facebook profiles. The Microstrategy gateway opens the possibility of "using Facebook as a CRM database that everyone keeps up to date," he said.

The iPhone app is a first test, but Guess could later add Web-based Facebook apps integrated with the Microstrategy gateway.

Microstrategy's LaRow said Guess is the first company willing to talk about what it is doing with Gateway for Facebook, but four other major brands are also "very close" to releasing something. The industries include financial services, gaming, and a "big time" consumer products company, he said. Although many of Facebook's own integration efforts are currently focused on partnerships with media companies, Microstrategy wants to focus on the "other 99%" of companies wanting to reach consumers through Facebook, he said.

Facebook data privacy rules require that applications only use profile data for the purpose it was originally requested, and each company that implements Gateway for Facebook will be responsible for adhering to those rules. Using the email from someone's Facebook profile for purposes of matching it with other records for that customer would be legitimate if it improves the customer's experience with the application. Loading that same email address into another marketing application would be a violation of the policy, unless the user gave permission, he said.

"I'm sure if companies abuse it, Facebook will turn them off, which it has full rights to do," LaRow said.

Gateway for Facebook is offered as a cloud application, which can be integrated with any Facebook application. Customers can either download the data it gathers to their own servers or load it into Microstrategy Wisdom, a cloud-based data warehousing application.

Relich said he plans to take advantage of the Wisdom infrastructure to build analytics that will combine the Gateway for Facebook data with information extracted from the Guess loyalty program for those same customers.

"If I can get a big enough pool of people to participate, customers will get value," Relich said. If you're a really high-value customer, you will get special deals, he said. Meanwhile, by personalizing online coupons and displaying an onscreen barcode that customers must scan at checkout, he said he can avoid the "leakage" that can occur when valued customers receive email coupons and share them with their friends. "We can target offers to those most profitable segments, and there is no way they can forward it on to someone else," he said.

Guess is testing a prototype of the Facebook iPhone app now and hopes to have it available in the Apple App Store within 30 days, Relich said.

Most companies have little control over their heaps of unstructured data, our research reveals. It's time for a content management strategy. Get the new, all-digital InformationWeek supplement. Download it now. (Free with registration.)

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